[4] A state may borrow money and may issue bonds for the purpose. But these bonds are not bills of credit, because they are not designed to circulate as money.
The evils of state issuance of bills of credit we cannot appreciate, but the framers of the constitution had experienced them, and based this provision on that bitter experience.
[5] This has the same general purpose as the preceding.
It will be observed that there is no such prohibition on the United States, and the implied power to emit bills of credit and to make things other than gold and silver legal tender, has been exercised.
[6] Forbidden to the states for the same reason that they are forbidden to the United States.
[7] The purpose is to preserve the legal obligation of contracts. "The spirit of the provision is this: A contract which is legally binding upon the parties at the time and place it is entered into by them, shall remain so, any law of the states to the contrary notwithstanding." [Footnote: Tiffany quoted by Andrews.]
Under this provision many questions have arisen. One of them is this: May a state pass insolvent or bankrupt laws? It has been decided by the United States Supreme Court that a state may pass insolvent laws upon future contracts, but not upon past contracts. But no state can pass a bankrupt law.
Clause 2.—Conditional Prohibitions.
No state shall, without the consent of the congress,[1] lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws;[2] and the net produce of all duties and imposts, laid by any state on imports or exports, shall be for the use of the treasury of the United States;[3] and all such laws shall be subject to the revision of the congress.[4] No state shall, without the consent of congress, lay any duty of tonnage,[5] keep troops or ships of war in time of peace,[6] enter into any agreement or compact with another state,[7] or with a foreign power,[7] or engage in war, unless actually invaded, or in such imminent danger as not to admit of delay.[8]_
[1] By implication, congress may give the states permission to do the things enumerated in this paragraph. But it never has.